Plans to roll over Greece's debt risk putting the country into a selective default, ratings firm Standard & Poor's warned Monday.
Eurozone finance ministers late Saturday cleared the way for the next 12-billion-euro tranche of last year's 110-billion-euro ($160 billion) EU-IMF bailout for Greece after the country's parliament passed tough austerity cuts.
But negotiations for the next tranche could be more complicated because some governments want private investors to share the burden by agreeing to voluntarily "roll over" their Greek debt.
France, whose banks hold a sizeable proportion of Greek debt, has proposed among other measures that lenders roll over their loans into new 30-year bonds, giving Greece more time to put its financial house in order.
"It is our view that each of the two financing options described in the Federation Bancaire Francaise (FBF) proposal would likely amount to a default under our criteria," it said.
The "debt roll over proposal could result in a selective default for Greece," it said.
S & P said the proposal by French banks may change "and it is possible that it could take a form that results in a different rating outcome."
But it maintained that regardless of whether the proposal is implemented "we continue to believe that (Greece's) uncertain ability to implement the revised EU/IMF programme is a key risk weighing on its credit standing."
S & P last month lowered Greece's long-term rating to "CCC" from "B".
It said one of the reasons for the downgrade was the "rising risk" that the financial rescue package "could require private sector debt restructuring in a form that we would view as an effective default of its debt obligations."